Ensuring Network Resilience

Health plans are navigating a challenging landscape. Raising costs are pressuring budgets, regulatory shifts are reshaping network structures, and provider mergers continue to consolidate the market. For employers managing employee health benefits, ensuring network resilience—keeping care accessible, affordable, and high-quality—has never been more critical.?

The Triple Threat Facing Employers Health Plans

First, price cuts are straining healthcare finances. Insurers and government programs are pushing cost-containment measures, leading to tighter margins for health systems. Employers are feeling the impact as rising premiums persist despite efforts to negotiate lower rates. Meanwhile, evolving regulations—including expanded value-based care mandates and state-level transaction review laws—are prompting providers to adjust, sometimes causing network disruptions.

At the same time, provider consolidation continues to reshape the healthcare landscape. As of 2023, the top 10 health systems owned about a sixth of all hospitals , and cross-market mergers are driving price increases. While mergers claim to create efficiencies, and while they can offer administrative benefits, they often lead to fewer provider choices, higher costs, and challenges in care coordination. Employers in states with new pre-merger notification laws, such as Indiana, may suddenly find their provider networks shrinking. Rural employers, meanwhile, may face significant cost hikes as hospital consolidations limit competition and drive up rates.

Why Network Resilience Matters Now

Resilient networks help employers maintain stable, cost-effective healthcare options despite ongoing disruptions. A strong network ensures employees have access to high-quality care even in shifting provider landscapes. Without proactive management, consolidation and cost pressures can lead to higher expenses, limited provider access, and disruptions in employee access to healthcare.

Employer health plans need a strategy to navigate these shifts and building a network on a foundation of high-quality providers is an excellent start. A strong network foundation gives employers flexibility in their network design that can better absorb market shifts and maintain access to care.

Strategic Steps to Build Resilience

Employers can strengthen their health plans by leveraging data to assess network stability and identify potential gaps. Analyzing referral patterns can prevent employees from being funneled into newly merged, high-cost providers when more efficient alternatives exist. Transparency is equally critical, both price and quality, to guide employees toward high-value care, which becomes even more important in a tightening financial landscape.

Proactive collaboration with providers can also mitigate network disruption. Engaging early in merger discussions helps employers anticipate changes and explore partnerships that preserve access. Some health systems are divesting non-core assets, creating opportunities for new provider relationships. Additionally, staying agile in response to regulatory oversight—whether through federal antitrust reviews or state-level laws—means having contingency plans, such as expanding telehealth services or incorporating additional in-network urgent care options.?

Staying Ahead of Disruption

Healthcare consolidation and regulatory oversight will continue to shape the market. Employers that proactively assess their networks, apply data-driven insights, and strengthen provider partnerships will be best positioned to navigate these ongoing challenges.?

Building a resilient network is about ensuring long-term stability and value for both employees and organizations. By taking a strategic approach now, healthcare leaders can secure adaptable, cost-effective networks that stand strong in an evolving market.

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